Tyro Payments Ltd. · ASX:TYR
Tyro Payments — Investor Day (October 2023)
36 slides from Tyro Payments's investor day presentation, Oct 18, 2023
Slide 1: Investor Strategy Day
Investor Strategy Day Management Presentation 18 October 2023 0
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer This presentation has been prepared by Tyro Payments Limited ABN 49 103 575 042 (Tyro). It provides summary information about the activities of Tyro and its subsidiaries current as at the date of this presentation. The information in this presentation is of a general
Slide 3: Agenda for today
01 Introductions 02 Tyro's strategy Agenda 03 Deep-dive on our core capabilities: for today In-house switch and banking (incl. ADI) 04 Transformation Roadmap and Capital Management 05 Tyro Health: Deep-dive and Product Demonstration 06 Answering your questions 2
Slide 4: Introducing our experienced management team
Introducing our experienced management team Jonathan Davey Deanne Bannatyne Chief Executive Officer Chief Growth Officer • Appointed CEO in 3 October 2022 • Joined Tyro in April 2023 • Joined Tyro in May 2021 following Tyro's Medipass acquisition • Previously, GM of Payments at NAB, GM Financial • P
Slide 5: Tyro's strategy
Tyro's strategy 4
Slide 6: We are growing our installed base of customers, in a growing market
We are growing our installed base of customers, in a growing market We serve a large and fast-growing market of 2.6M (+4% CAGR1) Australian We have a sizable (69k) and loyal (29% CAGR) businesses, turning over $836B (+8% CAGR1) in card payments annually installed base of customers 3-year CAGR FY20-2
Slide 7: We help merchants navigate complex needs
We help merchants navigate complex needs We manage the most critical function, inherently the We have an opportunity to create integrated solutions – commercial centre of a business: just as we have in cashflow management and banking authorising and processing payments Marketing & Strategy Merchant
Slide 8: Tyro is well-positioned to deliver continued growth
Tyro is well-positioned to deliver continued growth We won leadership in our verticals because we built payments from the ground up for Australian businesses, serving their unique requirements. We made SME payments our core focus, not an adjacent business. Our in-house payments switch, and banking l
Slide 9: Tyro's strategy
Tyro's strategy Continuing to provide industry-specialised payment and cashflow solutions for Australian businesses. We aim to provide customers the fastest, lowest-friction, and most reliable way to get paid and manage cashflow. Growing our installed base of customers, in growing verticals, with th
Slide 10: Our market is evolving, creating opportunities for Tyro
Our market is evolving, creating opportunities for Tyro Competition • Emergence of fast-growing local disruptors and global scale-ups entering the market to meet merchant needs including • Merchants shifting from hardware to software-based solutions e.g. mobile-based POS apps integrated • Many new e
Slide 11: Tyro provides industry-specialised payment and cashflow solutions, to support Australian businesses
Tyro provides industry-specialised payment and cashflow solutions, to support Australian businesses In-person payments for Australian businesses Omnichannel offering for in-person customers We build from the ground up to solve problems and We provide competitive online features, create value for Aus
Slide 12: Attractive verticals provide us headroom for further growth
Attractive verticals provide us headroom for further growth Total TAM1: $836B (FY23) 8.1% CAGR (FY20-FY23) Vertical / Hospitality Retail Health2 Services Other Verticals Enterprise Segment Address Tyro focus Maintain Maintain Grow Grow Enter selectively TAM1 ~$226B (FY23) ~$610B (FY23) Tyro share Me
Slide 13: We win through a unique combination of strengths
We win through a unique combination of strengths Solve industry-specific Fast, reliable, cost Independent and Seamless and convenient Broad, diversified needs for Australian SME competitive payments interoperable with our cashflow management distribution network merchants infrastructure merchants’ e
Slide 14: Our competitors do not match our hard-won capabilities
Our competitors do not match our hard-won capabilities Large Aus. Local Global Integrated Other Tyro's differentiators Tyro's capabilities banks PayFacs scaleups POS POS Solve industry-specific • Australian SME focused needs for Australian SME • Full-featured payments offering merchants • End-to-end
Slide 15: We will continue to build on our traditional strengths to win
We will continue to build on our traditional strengths to win Solve industry-specific Fast, reliable, cost Independent and Seamless and convenient Broad, diversified needs for Australian SME competitive payments interoperable with our cashflow management distribution network merchants infrastructure
Slide 16: Two case studies illustrating how our strategy unlocks opportunities for innovation
Two case studies illustrating how our strategy unlocks opportunities for innovation We solve industry- We offer seamless and specific needs for convenient cashflow Australian SME management integrated merchants with payments Example Case Study I Example Case Study II Online extras claiming Cashflow
Slide 17: Deep Dive on our Core Capabilities
Deep Dive on our Core Capabilities 16
Slide 18: Our in-house payments assets provide an innovation platform and competitive differentiation
Our in-house payments assets provide an innovation platform and competitive differentiation Deep Dive 1: Proprietary switch and in-house back-office 17
Slide 19: We have assembled an integrated end-to-end system
We have assembled an integrated end-to-end system CRM - Merchant/Terminal/User Management eCommerce Banking Health Mastercard Fund Card Scheme Platform Payment Links Integrations Gateway Services Tyro (MPGS) Backoffice Business Account Tyro Health Online In-Store Card Merchant Tyro Transaction Clear
Slide 20: In-house payments processing enables innovation at low-cost
In-house payments processing enables innovation at low-cost Innovation enabled through our Low-cost payments processing in-house payment processing • Healthcare payment rails (e.g., Private Health extras, Medicare) • Payments-integrated cashflow solutions • Wide-scale direct POS/PMS integrations Nex
Slide 21: Our banking model provides enhanced economics, and enables product differentiation
Our banking model provides enhanced economics, and enables product differentiation Deep Dive 2: Innovative banking product and ADI licence 20
Slide 22: Three cashflow management products support earnings
Three cashflow management products support earnings What we offer Returns 1 Tyro Business Loan FY23 FY22 GROWTH BANKING BUSINESS $'000 $'000 % Loan Originations ($m) Deposits ($m) 2 Tyro Bank Account 150 Loan Originations 149,710 99,071 51.1% +51% YoY Interest income 11,069 4,877 127.0% 3 Term Depos
Slide 23: Our banking model has strategic advantages
Our banking model has strategic advantages Non-exhaustive Innovation enabled through our Integrated banking improves payments economics Low-cost banking model differentiated banking platform • Repay-as-you-trade +61 Favourable NPS from customers that hold banking • Time based tiered interest on our
Slide 24: Transformation Roadmap and Capital Management
Transformation Roadmap and Capital Management 23
Slide 25: Pursuing opportunities now to deliver value over three horizons
Pursuing opportunities now to deliver value over three horizons Next 12 – 24 months Next 6 – 18 months Capitalise on revolutionary growth opportunities to create new value Next 12 months Transform our business to • Innovate in new verticals drive sustainable, profitable growth Maximise value from ex
Slide 26: Our EBITDA margin continues to improve
Our EBITDA margin continues to improve EBITDA Margin (% of Gross Profit) Earnings Guidance Cost savings delivered Tyro Operating Costs ($m) ~26% 22% Preliminary op-model efficiencies 12% Optimised contractor mix 7% Delivered automated onboarding +9% +31% Cost savings in-progress • Completing o
Slide 27: Our transformation plan is to sustainably maximise the P&L
Our transformation plan is to sustainably maximise the P&L FY23 Banking • Go-to-market focused on value from the installed base • Systematic pricing of front-book and back-book • New marketing and distribution strategy Payments • Customer journey re-design to reduce lead leakage and losses • Dedicat
Slide 28: We will continue to deploy the increasing capital we generate to lift customer lifetime value
We will continue to deploy the increasing capital we generate to lift customer lifetime value We are increasing our Free ….and expect to generate deployable capital We will invest deployable capital against Cash Flow from operations…. beyond target ratios and current growth plans priorities that max
Slide 29: Tyro Health
Tyro Health Deep Dive and Product Demonstration
Slide 30: Health payments is a large and growing market
Health payments is a large and growing market 8% of Australian household spending is on health, up from 6.4% in 20221 80+ Mix of federal, state-based Funders & Schemes and private insurers Individuals Federal government Australian funders & schemes Private insurers State governments 1. Household Spe
Slide 31: Each health sub-segment has unique payments needs
Each health sub-segment has unique payments needs 80+ Mix of federal, state-based Funders & Schemes and private insurers Pharmacists GPs Dentists c. 300,000 Healthcare Providers Unique needs for each health segment and modality c. 300k Australian Healthcare Specialists2 Providers1 (NHWDS, FY21) Alli
Slide 32: Creating a health payments platform that will be adopted by users, is a complex task
Creating a health payments platform that will be adopted by users, is a complex task 80+ Mix of federal, state-based Funders & Schemes and private insurers Simple, real time claims processing requires deep understanding of and c. 300,000 Unique needs for each integration to each of Healthcare Provid
Slide 33: Tyro Health makes it easy for providers to get paid
Tyro Health makes it easy for providers to get paid Deep integrations, built over 14 years ECLIPSE Over 50 integrated insurers and schemes Over 77 integrated software partners Plus many more market leaders in GP, dental, allied health and pharmacy 32
Slide 34: Our product range includes leading EFTPOS and Online solutions
Our product range includes leading EFTPOS and Online solutions Supporting claiming for all types of care delivered: out-patient, in-patient, at home, telehealth 33
Slide 35: Tyro Health Online is at the centre of our provider experience
Tyro Health Online is at the centre of our provider experience 34
Slide 36: Answering your questions
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